Jaiprakash group bids for Malvika Steel

Financial institutions seem to have finally found a taker for Malvika Steel with the New Delhi-based Jaiprakash group bidding for the company.

The Debt Recovery Tribunal (DRT) has put the Vinay Rai-promoted Malvika Steel under the hammer to clear off the over Rs 1,200 crore outstandings due to institutions led by IFCI.

Jaiprakash Industries' managing director Manoj Gaur confirmed that his group has bid for the assets of Malvika. Although the size of his bid could not be ascertained, industry experts said Rai could not be contacted.

DRT could receive nearly Rs 600 crore from the unit, which has a sprawling plant with 740 acres in northern India.

It was not confirmed whether there is any second bid for Malvika. The country's largest steel company, Steel Authority of India had previously expressed interest in acquiring the Amethi-based company. But its consultant Mecon advised against acquiring the entire assets of the company.

Gaur said the foray into steel industry gels well with the group's existing businesses of cement, power and real estate. "We are in all core businesses, except steel. An entry in steel will bring better synergy between the areas we operate in," he added.

The Rs 3,000 crore project was left unfinished in 1998, within just 10 months of getting off the ground. Malvika Steel's plant was initially planned to have a capacity of 8 lakh tonne of sponge iron and 1.2 million tonne of iron pellets, but it was converted into a 6.35-lakh-tonne integrated steel plant for manufacture of long products that are used extensively in the infrastructure and construction business.